IT consulting is booming as businesses transition to mobile and cloud-based computing.
By the Numbers
8.1%: Average net profit margin, according to Sageworks
$327.5 billion: Projected revenue for 2012, according to IBISWorld
427,904: Number of enterprises in 2012, according to IBISWorld
447,940: Number of enterprises projected for 2017, according to IBISWorld
4: Average number of employees per IT consulting firm, according to IBISWorld
200,000: Number of employees added in IT consulting from 2007 to 2012, and the number expected to be hired in the next five years
Why It's Hot
The prevalence of cloud computing is finally pushing companies to get rid of desktop computers, replacing them with mobile devices that allow employees to work from anywhere, anytime. "This year or next year, we’re going to see tablets outsell PCs," says Jack Plunkett, CEO of market research firm Plunkett Research. "People just want the mobility." But not all employees have the expertise to implement this technology or even to use it right off the bat. That provides a great opening for IT consultants.
Since 2007, the management and technology consulting industry has been growing by an average of 8.3% a year. Profit margins have grown at 8.1% annually, according to financial information provider Sageworks. Over the next five years, the industry is expected to grow a more slowly, at about 2.9% a year. But there's no shortage of opportunity: By 2017, IT consulting will be about a $379 billion market.
The industry's best customers are energy, healthcare, and other businesses that require a significant amount of customer interaction. They're aggressively seeking to move that interaction online, preferably to mobile devices. In many cases, IT consultants are on-site with their clients, reducing operating costs. Another alternative is to outsource IT, so you'll have to be able to convince would-be clients that you're a cost-effective alternative.
Barriers to Entry
Startup IT consulting firms face some of the same challenges as their would-be clients. Notable among them: Difficulty hiring tech-savvy workers. The talent pool has remained small, which means the IT consultants are in many cases competing with their clients for top tier staff.
JOHN MCDERMOTT is a business and culture reporter whose work has appeared in the Chicago Tribune and Playboy and on AOL.com. He recently moved from Chicago to Brooklyn, New York, to work for Inc.com. @J_M_McDermott